EFFECTS OF WORKFORCE DIVERSITY ON EMPLOYEE PERFORMANCE IN THE NIGERIAN BANKING SECTOR

EFFECTS OF WORKFORCE DIVERSITY ON EMPLOYEE PERFORMANCE IN THE NIGERIAN BANKING SECTOR

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CHAPTER ONE

INTRODUCTION

1.0 Background to the Study

The world’s increasing globalization needs a lot of interaction among people from various backgrounds than ever before. This is so because, individuals no longer live and work in narrow surroundings; as they are currently a part of a worldwide economy competing in nearly all part of the world (Patel, 2016). On these grounds, organizations are aiming to become more diversified in order to gain competitive advantage by becoming more creative, innovative and open to useful change.

Today business workplace is changing at an increased speed and the change in the employees’ demographics, continuing growth of the globalization and requirement for efficient and effective collaboration have surfaced as significant forces driving the importance of diversity in organizations. With the increase of globalization and competition, the workforce in all industrialized countries has become progressively heterogeneous. Advances in technology and the advent of a worldwide economy have brought the people of the world existing in the same place, nearer to each other. Griffin & Moorhead (2014) pointed out that having a diverse workforce requires managers to identify and manage the varied attribute that exist among the employees in the organization. Therefore, businesses, educational systems and other entities are investigating ways to better serve their constituents to attract and retain the finest and most qualified employees (Gupta, 2013).

Workforce diversity refers to those significant differences and similarities that are present among employees within an organization (Griffin & Moorhead, 2014). Nwinami (2014) says it represents that uniqueness which includes an individual’s personality, age, gender, ethnicity/race, religion, marital status, income, the work experience and all those views which supposes and sustains an organizations core values. It also means those organizations that are turning out to be more varied with respect to it workforce composition based on characteristics as age, ethnicity, expertise, etc. (Robbins & Judge, 2013).

Human resource is an important asset for any organization, and as such, having a diversified workforce is a primary concern for most organizations. Although, it has become necessary for organizations to employ a diversified workforce, at the same time, it has become quite challenging for organizations with increasing diversified workforce to reap the benefits of diversity while managing its potentially disruptive effects (Kreitz, 2008; Saxena, 2014). Organizations have recognized the fact that it is through the collective effort of its diversified workforce that monetary resources are harnessed to achieve organizational goals.

For organization to reach its goals, the skills, knowledge, attitude and efforts of its workforce have to be sharpened occasionally to optimize the effectiveness of its workforce and to enable them to meet greater challenges. Organizations are made up of individuals and without the workforce; organizations cannot achieve their goals (Mullins, 2010). For this reason, the management of their human resources is also a crucial issue for organizational leaders (Saxena, 2014).

To be successful, it is imperative that organizational leaders understand just how the social work environment have an effect on the employees’ beliefs about work and they must have effective communication skills to be able to develop the self-esteem and confidence in all its members (Griffin & Moorhead, 2014). Hence, to achieve and maintain competitive advantage over competitors, managers must be able to draw from the most valuable resources i.e. the competencies of its workers. Based on the growing richness of diversity in the world and in the workforce, managers have to spread out their outlook and use innovative approaches to achieve success.

Empirically, work place (workforce) diversity is found to have a contrasting dual implication on organizational effectiveness. Milliken and Martins (1996), opines that 'diversity appears to be a double-edged sword, increasing the opportunity for creativity as well as the likelihood that group members will be dissatisfied and fail to identify with the group’. Some studies have found that various forms of diversity are associated with greater innovation, improved strategic decision making, and organizational performance. Other research shows that various types of team and organizational diversity sometimes increase conflict, reduce social cohesion, and increase employee turnover (Jackson, Joshi, & Erhardt, 2003; Webber & Donahue, 2001). The demographic composition of today’s workplace, occasioned by the international trend toward increased immigration and the globalisation of firms, is increasingly becoming diverse (Johnson, 2002; Yaprak, 2002). The demographic trends in developed and developing countries—aging workforce, growing representation of women and minorities in the workplace, and the rising number of young people in developing countries has altered homogeneous work settings of the recent past (Mor-Barak, 2005; Gorski, 2002). Thus, given these demographic and organizational trends, business organizations are contending with the challenges of effectively managing a diverse workforce.

Research has shown that business organizations are increasingly embracing the use of workgroups as a strategy-structure mix in the pursuit of organizational goals. This new trend in organizing work is predicated on flexibility, innovation, and quick decision making prospects inherent in a team-work setting. In a climate of increasing competitiveness, many organizations rely on workgroups to generate the innovations necessary for sustained business success (Mumford & Licuanan, 2004; West & Anderson, 1996). In addition, the contemporary demographic changes, increasingly globalized markets, greater mobility, and laws aimed at promoting fairness in recruitment practices, doubtlessly is precipitating diversity within work- teams in today’s organizations (Williams & O’Reilly, 1998). Richard (2000) examined firm wide business strategies as a variable in determining the relationship between diversity and performance. Richard (1999) and Richard & Johnson (2000) espoused human resource practices as possible contextual factors that influence the diversity performance link. In this study, we seek to extend the existing research on workplace diversity by conceptualizing and empirically examining the effects of organizational culture and business strategies as contextual environments of workgroups in exploring the impact of workplace diversity on organizational effectiveness.

1.1 Statement of the Problem

The work environment is becoming more complex due to globalization and competition which as a result has necessitated the need for a workforce that is made up of people with varying age, experience, knowledge and backgrounds to maximize competitive advantage (Ragins & Gonzalez, 2003). According to Childs (2005) Organizations who want to gain competitive advantage must widen their perspective about workforce diversity and diversity management, and the management must commit themselves to ensure that diversity management is a part of their daily operations.

Nigeria is known to be the giant of Africa with a population of over 198 million people and more than half the population consists of people of working age (Akinnusi, Sonubi, & Oyewunmi, 2017). Hence, there is a large pool of talent of which organizations draw from to achieve its goals. To manage the workforce, managers have created diversity policies that are in line with the a Labour Act and other laws that have in put in place to protect all kinds of employees from discrimination because of his/ her social categorization (Ugwuzor, 2011). However, Foma (2014) opined that some organizations in a bid to escape lawsuit or other legal actions and to also put on a public show that makes them gain good corporate image, they pretend to embrace diversity rather than show a genuine desire for it by demonstrating true commitment to the principles of diversity and inclusion.

As Ugwuzor (2011) citing Mustapha (2005) pointed out, in Nigeria, there appear to still be cases of tribalism, regional identities, nepotism and discrimination both in the public and private organizations. Cases of ethnic bias and other forms of discrimination still take places in organizations during hiring, promotion and other employer-employee relation practices. Hence, managements are faced with the big challenge of managing its diverse workforce and the challenge of making sure that conflict of interest in policies and practice implementation are minimized (Akinnusi, Sonubi, & Oyewunmi, 2017).

Though some organizations train their new intake upon hiring on job related issues yet, individuals still take decisions and showcase attitudes and bahaviour that go against diversity principles. One reason could be that with diversity practices, employees enter into an environment that compels everyone to work together with other workers that are dissimilar to them. This kind of forced inclusion can create an environment of conflict amongst employees, discrimination and other challenges of diversity. It points out that, countless studies have been conducted on work place diversity. This study is provoked by the gap left unfilled by a substantial number of research works that has been conducted on workplace diversity and its significance on the corporate culture. In recent years Diversity Management and workforce diversity have been substantial and as such have forced companies to embrace these concepts in their companies with the aim of increasing productivity and profit. This forced integration has created divergence and uncertainty in the workforce, as management is not skilled enough to control the concept of diversity management and its ethics, and so managers are finding it difficult to effectively practice diversity management, which in turn has become an albatross on their neck. Managers find it difficult in knowing the factors that contribute to effective diversity management or the exact leadership tasks that can be achieved to effectively and efficiently deal with issues related to workplace diversity.

1.2 Research Objectives

The general objective of this study was to examine the relationship between workforce diversity and employee performance in an organization.

The specific objectives of this study are to:

1. To examine the relationship between gender diversity and employee effectiveness in organization.

2. To investigate the relationship between age diversity and employee effectiveness in organization.

3. To examine the relationship between ethnic diversity and employee efficiency in organization.

4. To inspect the relationship between educational background and employee efficiency in an organization.

1.3 Research Questions

1. Does gender diversity have significant relationship on employee effectiveness?

2. Does age diversity have significant relationship on employee effectiveness?

3. Does ethnic diversity have significant relationship on employee efficiency?

4. Does educational diversity have significant relationship on employee efficiency?

 1.4 Research Hypotheses

Hypothesis 1:

Ho: There is no significant relationship between gender diversity and employee effectiveness.

H1: There is a significant relationship between gender diversity and employee effectiveness

Hypothesis 2:

Ho: there is no significant relationship between age diversity and employee effectiveness.

H1: there is a significant relationship between age diversity and employee effectiveness

Hypothesis 3:

Ho: there is no significant relationship between ethnic diversity and employee efficiency.

H1: there is a significant relationship between ethnic diversity and employee efficiency.

Hypothesis 4:

Ho: there is no significant relationship between educational diversity and employee efficiency.

H1: there is a significant relationship between educational diversity and employee efficiency.

1.5 Significance of the Study

The aim of this study was to examine the effect of workforce diversity on employee performance by investigating the correlation between workforce diversity and employee performance in an organization.

Workforce diversity is a significant topic for government, organizations and the society (Akinnusi, Sonubi, & Oyewunmi, 2017). First and foremost, the findings of this study will add to existing knowledge that will aid in understanding of the workforce diversity in general and its relevance to employee performance, which in turn leads to organizational performance and it will be essential to organizations that are equipped with diversified workforce.

To researchers and academicians, the study will serve as a reference to other researchers who intend to conduct similar or related studies on workforce diversity in the future as it will provide reliable insight that are useful for educational purposes. This study has also provided information that could form the basis for future research.

To employers and management of organizations, this study has provided in-depth knowledge explaining how workforce diversity has an effect on performance. The study provides key information in terms of recommendations and suggestions that will be useful in improving the general policies and practices of workforce diversity management in organizations. It provides information that will help organizational leaders to be able to make out solid strategies and best practices for hiring or recruiting, developing, retaining, engaging and motivating a high performing diversified workforce. This study is also beneficial to organizations striving to create a culture that is inclusive rather than exclusive. Also, multinational organizations will also understand the need for diversity management so as to manage its workforce across the globe and also understand the social structures (i.e. the religion, language, etc.) of the country where it is operating.

1.7 Scope of the Study

The study was restricted to only First Bank Nigeria Plc. It examined the effect of workforce diversity on employees’ performance in First Bank. The study was also limited to few workforce diversity- age, gender, ethnicity and educational background diversity and also limited to employee performance. The population of the study was limited to employees of First Bank Nigeria Plc., Sokoto North, Sokoto State.




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